The German economy is gradually losing momentum. Car sales are recovering, but damage of the third quarter of 2018 has not been repaired yet. Declining IFO indices also point at lower growth, but not a recession.

Global growth will decline moderately in the coming years, both in advanced and emerging market economies. Persistent risks such as escalation of the trade war or a disorderly Brexit are a permanent concern in this slowdown.

The US yield curve is getting flatter, which means that long term rates are only slightly higher than short term rates. We expect the yield curve to invert in 2019, which means that long rates fall below short rates. This would signal a recession in 2020.

This Special re-assesses the economic impact of the US-China trade war, using more advanced methodologies. Our analysis shows that China disproportionately bears the brunt of a US-China trade war, especially in case of a further escalation.

During the crisis, unemployment in Spain increased rapidly. In the past years, employment has substantially recovered due to strong economic growth and labour market reforms. That said, the unemployment rate is still high and significant challenges remain.